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AMC Networks (AMC Global Media) · AMCX

PUBLIC DATA CASEHYPOTHETICAL INVESTMENT TERMSHOLD
Five-minute case summary

AMC Networks (AMC Global Media) — Corporate credit — senior secured notes of a levered, declining linear-TV network

PUBLIC DATA CASEHYPOTHETICAL INVESTMENT TERMS
HOLD
1
The opportunity
Hypothetical purchase of $100M face of 10.50% Senior Secured Notes due 2032 at 95.0 (cash investment $95.0M): current yield 11.1%, yield to maturity 11.7%.
2
The question
Does a 11.7% yield on a rank-1 secured claim compensate for 20% probability-weighted default risk and 66% severe-case loss?
3
The thesis
Hypothetical: buy $100M face of the public 10.50% Senior Secured Notes due 2032 at an assumed 95. The notes are first-lien on substantially all assets and now sit ahead of only $420M of unsecured/convertible debt, but AOI fell 46% in H1-2026, coverage is below 2x, there is no revolver, and the $1.3B of secured claims is covered only ~1.1x by a going-concern value at 4.5x LTM AOI (and about 0.6x at the Downside trough). The question is whether a ~12% yield compensates for thin collateral coverage if linear decline accelerates.
4
The risk (what causes loss)
  • Thin interest coverage: EBITDA / interest 1.84x at LTM Jun-26 (EBITDA could fall 46% before coverage hits 1.0x).
  • Severe-case valuation recovery of 34% is below the 95.0 purchase price: a 66% loss given default.
  • Downside-case recovery of 61% falls short of the purchase price.
  • Severe case produces a payment default in LTM Jun-29E.
5
The protection
  • First-priority secured position on substantially all assets; 0% of recovery value is senior to us and 84% through our tranche.
  • Liquidity of $464M (27% of total debt).
  • Base-case refinancing tests pass for all 2 maturing tranche(s); 2 are repaid from cash.
  • 10.5% fixed coupon with a pull-to-par from an assumed 95 purchase price
6
The base case
Base case (45%): revenue -4.5% in LTM Jun-27E, EBITDA margin 14.0%; no default; IRR 12.6%, MOIC 1.38x vs 12% hurdle.
7
The downside
Downside (35%): EBITDA $163M at the trough, peak net leverage 7.3x, covenants breach in LTM Jun-28E; no default; IRR 6.5%. Severe (20%): default in LTM Jun-29E, IRR -10.8%.
8
The recovery
If the company defaults, recovery value is $479M (liquidation) in the severe case → 34% recovery (66% LGD) on the target tranche; downside 61%.
9
The decision
HOLD. HOLD (do not size yet): Expected-cash-flow IRR (probability-weighted) clears hurdle (6.1% vs ≥ 12.0%); Downside recovery meets minimum (valuation waterfall) (60.6% vs ≥ 70.0%); Principal protected in severe case (recovery ≥ price) (34 vs 95.0 vs recovery ≥ price).

Generated from the structured model (no free-text generation beyond the analyst’s thesis and risk lists). Hypothetical terms are underwriting assumptions; nothing here is a real transaction.